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Home loan applications plunge

Wednesday, November 06, 2013 - 01:19

Nov. 6 - Weak data on mortgage loans and home refinancing are the latest signs of a slowdown in the housing recovery amid higher rates. Fred Katayama reports.

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TV AND WEB RESTRICTIONS~****~ Applications for U.S. home loans did an about-face, falling 7 percent in the latest week. The Mortgage Bankers Association's refinancing index also tumbled. They're the latest signs of a slowdown in the housing recovery that has supported the economic rebound. This comes on the heels of news that in September, pending home sales fell by the most in more than three years and sales of previously owned homes slid, too, as prices cooled. Interest rates have risen sharply since May, dampening demand for home loans and refinancing. All this raises concerns about the health of the economy because rising home prices and home demand have been spurring consumer spending. The weak batch of recent economic data includes consumer confidence and manufacturing. And while corporate earnings reports have been mostly positive, revenue growth has been disappointing. The slowdown in home sales has scared investors away from home builder stocks. The Dow Jones U.S. Home Construction Index has fallen more than 20 percent since mid-May. Investors have been weighing when the Fed will scale back its bond purchases that have kept rates low. They could be in for a weak jobs report for October because of the government shutdown that kept workers at home.

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Home loan applications plunge

Wednesday, November 06, 2013 - 01:19